The Startup Backlash

A reading list and some thoughts

There was a time not too long ago when going into finance or consulting was the post-graduation path to success for many young people. You didn’t even need to be a finance major to get aggressively courted by the bulge bracket firms. Goldman Sachs, in particular, seemed to have an obsession with taking the most liberal-arty kids and schooling them in the dark arts of the Excel spreadsheet and the PowerPoint presentation. En masse, Wall Street was sucking up the young and impressionable bright minds to work on products like collateralized debt obligations. If you don’t know how that experiment ended, google “2008 mortgage crisis”.

Fast forward ten years, “google” is a verb and a handful of my friends my age or older - many of them without technical backgrounds - are working for the company the verb comes from. Working for a tech company - or starting one - has become the hot career path. Everyone, from Mayor Bloomberg to the author of this article, has concluded that “coding” is the new “writing” or, more accurately the new “everything”. It was therefore only a question of time before we would see some sort of backlash against tech broadly and startups specifically. And indeed, it seems we are now going through a cultural moment where it’s impossible to go through a week without an article that trashes some aspect of the “tech scene” getting passed around.

This backlash might have reached its crescendo in George Packer’s article in the New Yorker; however, the fascinating aspect of this criticism is how much of it comes from within: people who have worked in technology startups criticizing aspects of the industry and the impact it is having on its environment. Here I collected just some of these articles (followed by some thoughts).

George Packer, “Change The World”, The New Yorker
Alex Payne, “Letter To A Young Programmer Considering A Startup”
Michael O. Church, “Don’t Waste Your Time In Crappy Startup Jobs”
James Somers, “Are Coders Worth It”, Aeon Magazine
Chris Tacy, “Douchebags Like You Are Ruining San Francisco”, Valleywag
Paul Carr, “Spies Like Us”, NSFW Corp (unlock valid only for 2 days - hurry!)

I started this article reminiscing about the finance-driven era for a reason: namely that in criticizing “tech” and “startups” as a valid career option for young people, one should be aware that the alternative in the modern world of professional services is, by and large, Wall Street.

James Somers supports this point when he says:

We’ve become a vortex on a par with Wall Street for precocious college grads.

Without passing a judgement on Wall Street (do I even need to), I think it’s useful to remember the broader context here. Somers continues with this sharp point:

But we’re not making the self-driving car. We’re not making a smarter pill bottle. Most of what we’re doing, in fact, is putting boxes on a page.

This gets me to the next level of criticism in this backlash which seems to be that much of what tech startups do is silly or stupid or pointless or socially-meaningless or not revolutionary enough. In his article, Packer makes a similar point in this observation:

It suddenly occurred to me that the hottest tech start-ups are solving all the problems of being twenty years old, with cash on hand, because that’s who thinks them up.

All of these observations are perfectly valid in a narrow sense. Broadly speaking, however, what I see is something different. Even if the vast majority of engineers and designers today are obsessing about boxes on a page and photo sharing apps and car rides, the sheer amount of money and attention that is going into technology today sends a strong signal to kids who will grow up in the future: technology and design matter; maybe you should study a STEM subject?

The other reason why the disappointment embedded in Somers’ and Packer’s sentiment is misplaced is what I will call the social portfolio theory. The same way that VCs invests in 50 shitty startups and expect to make maybe one phenomenal exit, it’s unreasonable to expect every or even many startups to make something truly revolutionary and socially impactful. What they both either forget or gloss over is that aside from thousands of silly apps we have seen some remarkable innovation. Take MOOCs for example. While saying they will revolutionize education is far from a foregone conclusion (many vehemently disagree with that notion!), I invite you to go listen to this interview with Daphne Koller, the co-founder of Coursera, for some moving examples of people from remote parts of the world with no access to education who take their classes.

And so, while it’s often tempting to dismiss the industry because of numerous examples of silly products, I think that criticism is plain unreasonable. The stronger criticisms, I believe, come in the realm of relationships: employee versus the company; the company versus its environment.

Are startups automatically better learning environments with a more exciting career path and better pay? I think Michael Church’s article gives some good reasons why that may not be the case. Anyone considering work in a startup should read his very specific advice.

Is tech bad for the country? Packer unwraps for us how Silicon Valley has affected the world it ostensibly resides in and the portrait is not very flattering. (Chris Tacy does an even more vivid job.) And yet, while calling out the industry for its hypocrisy with regards to diversity and social engagement is a fine point, broadly speaking, I find it difficult to distinguish what tech is doing to the valley and SF from what Wall Street has been doing to New York and London for decades. Is the problem here tech or (our special kind of) capitalism? Doesn’t every industry say the government is a problem? (From my experience in the health care industry, I can testify to you that they do.)

That is, until the NSA scandal broke. Nothing made the libertarianism of Silicon Valley more disingenuous than the fact that many of these companies are tools of secret government surveillance. This is why I had to include Paul Carr’s article about Silicon Valley’s participation in our security state infrastructure. The NSA revelations added a whole new dimension to the “changing the world” ethos.

I’ll conclude this little article review with an anecdote. I recently had dinner with a friend who was telling me about the relative difficulties of raising capital for funding something like an HIV drug trial versus a “small tech startup”. The bottom line was: why spend $200 million on a potentially lifesaving drug when you could fund a couple of hundred startups in hopes of 1 or 2 becoming billion dollar companies? This anecdote left me uncomfortably unable to find a silver lining: how do we as a society make sure that all capital doesn’t end up funding text boxes and photo-sharing instead of other critical innovation?

Discuss this article on Hacker News. And I’m @akristofcak.